Risk & Business Magazine JGS Insurance Magazine Fall 2018 | Page 4

EQUAL PAY
New Jersey's
Equal Pay Act
Five Things To Know
I
f you are familiar with New Jersey
antidiscrimination laws, you know
that it is illegal to discriminate “in
any way in the rate or method of
payment of wages to any employee
because of his or her sex.” This protection
has now been extended with the passage of
the Diane B. Allen Equal Pay Act—effective
July 1, 2018—to “any protected class” under
the law. This includes, among other things,
such characteristics as race, national origin,
age, marital status and disability.
Now would be a good time to ensure
your pay practices are in compliance.
Here are five important facts that you
should consider to fully understand the
importance of this new law:
1. STATE BUSINESS
Do you conduct business with the State of
New Jersey? Consider whether you contract
with the state for “qualifying services” or
“public works” as there are new reporting
requirements for such contracts to ensure
compliance with the new law. Information
such as gender, race, job category, hours
worked and compensation must be
provided to the state for each employee.
2. TREBLE DAMAGES
Employers that were found guilty of
discriminating in the past were required
to pay money damages to right the
wrong. The new law takes a more punitive
approach by allowing prevailing litigants to
4
recover “three times any money damages[.]”
This should make ensuring your company’s
compliance a top priority.
3. SOME PAY DIFFERENCES ARE STILL
PERMISSIBLE…
You would think that paying people
differently while performing similar tasks
is now prohibited under the law. However,
the Equal Pay Act recognizes certain
instances where pay differentials are
acceptable. For instance, paying employees
differently based on a merit or seniority
system is permissible. And the state has
created a “bona fide factors” test that
would also allow for differing pay rates
for similar tasks, though seeking out legal
advice would be wise before proceeding
under that test.
BY: BARRY E. FIELDS,
VICE PRESIDENT OF EMPLOYEE BENEFITS
JGS INSURANCE
EMPLOYERS NEED TO PREPARE
As noted, the Diane B. Allen Equal Pay
Act went into effect on July 1, 2018. It
is important to be thorough in order
to ensure compliance with this new
legal mandate and minimize the costs
associated with future litigation by
employees and the negative attention
that may result from a challenge to your
company’s pay practices.
Your organization should take steps to
ensure that, unless the exceptions noted
above apply, your existing pay practices
and policies related to compensation
result in equal pay for employees who do
substantially similar work. This should
involve a privileged pay audit where you
can determine whether your company has
any troubling pay disparities and, if so, take
steps to remedy any differences that could
be attributed to membership in a protected
class. +
4. BUT DON’T CUT PAY!
Employers may think that one workaround
to this new law is just to cut the pay of the
higher-paid employee down to the rate of
Barry Fields has over 26 years of employee
the lower-paid employee. Not so fast. As
benefits experience advising clients in a
stated in the Equal Pay Act, “[a]n employer
wide range of industries, professional and
… shall not reduce the rate of compensation
industrial, public and private, throughout
of any employee in order to comply with
Barry Fields has over 26 years of employee benefits experience
this[]” new law.
the United States and worldwide.
advising clients in a wide range of industries, professional and
industrial, public and
private,
throughout
the United
States
Barry
specializes
in providing
full-service
5. BACK, BACK, BACK,…
and worldwide.
benefits consulting to clients including
No, this is not a home run call. This
program
compliance,
plan funding,
Barry specializes in all
aspects design,
of providing
full-service
benefits
refers to the fact that, under the new
consulting to clients
including program
design, compliance,
underwriting,
wellness programs,
employee
law, employees who prevail in a pay
plan funding, underwriting,
wellness
programs,
employee
communications,
benefits
administration,
discrimination claim may be eligible for up
communications, benefits
administration,
employee
advocacy
employee
advocacy
and
the
use
of
effective
to six years of back pay. This is all the more
and the use of effective
strategies
in benefits
management.
strategies
in
benefits
management.
reason to comply with the Equal Pay Act.